Most states will let you sell meat privately with no interference. But if you want to sell commercially, your rabbitry will have to follow certain health code guidelines.

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This is not correct. Most states will let you slaughter your own animals, but if you sell to "the public" (and that means pretty much anyone who does not live in your home) you need to be licensed/inspected. You can sell live animals, but not processed ones. Most of the people who are selling meat to anyone are doing it illegally, with the attitude of "they gotta catch me first," and most health departments have better things to do than try to hunt for people doing this sort of thing. However, if they get a complaint, they will more than likely follow through with prosecution and fines.

I know people who have sold to freinds and family with no issues. Selling to "the public" would be putting an add in the paper or something of that nature. Private sales are not an issue.

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The people you know are doing it illegally, whether they know it or not. The way the law reads in NY, the "farmer" can sell live animals, they can allow the purchaser to slaughter on their property, but they can't slaughter for the customer on their property.

For sale to any buyer as meat,, the animals must be slaughtered at an inspected facility.

In the state of Washington any meat that is for selling purposes must be slaughtered at a USDA inspected processor, or by a USDA certified mobile butcher.
The sale of livestock, however, is completely unregulated. You can sell meat animals to anyone, as long as the animal is still alive.

Those are some of the laws known as the "blue laws". Are not regularly enforced, and most people could care less. Though selling live is preferred by the government, and by all means, the laws should be followed, no one is going to get that worked up if a couple dressed animals are sold or traded privately.

Actually, "blue laws" refers to laws regulating what you can't do on a Sunday - for example, in North Carolina, you can't sell alcoholic beverages before noon on a Sunday.

"Under the table" sales are done all the time, and as long as everybody is content, the law doesn't go looking for the violators. But if there is a complaint (a nosy neighbor that doesn't like the smell, or whatever) then such an illegal operation will be shut down.

If there is a complaint, even legal organizations can be shut down. If your rabbitry is just downright ugly, it can be complained as "an eyesore" or "smelly", even if it follows USDA guidelines to the letter. That alone can be enough for you to be asked to close down your operation.

I don't think that blue laws have to be on Sundays. They are just laws that are extremely stupid and weird. I don't know. There is another name for laws that are just not really enforced, but I can't remember it.